In a Statement of Cash Flows, Payments to Acquire Debt

question 16

Multiple Choice

In a statement of cash flows, payments to acquire debt instruments of other entities (other than cash equivalents) should be classified as cash outflows for

• A) operating activities.
• B) investing activities.
• C) financing activities.
• D) lending activities.

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Definitions:

General Contracting

The oversight and coordination of a construction project, typically involving hiring and managing subcontractors.

Subcontracted

The process of assigning part of the obligations and tasks of a primary contract to another party or contractor.

Valid Liens

Legally enforceable claims or rights against property to secure the payment of a debt or obligation.

Conditional Sale Agreement

A contract for the sale of goods where the purchase price is paid in installments and the ownership of the goods does not pass to the buyer until certain conditions, usually the full payment of the purchase price, are met.